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AFC joins human and social service agencies in lawsuit against Gov. Rauner and state agencies

May 4, 2016

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Updated on May 31, 2016:

The Pay Now Illinois coalition has grown to 82 human and social service agencies and companies suing Illinois Governor Bruce Rauner, Illinois Comptroller Leslie Munger and seven state agency department heads for breach of contract. On May 25, they filed a motion seeking a preliminary injunction for emergency relief that would require the state to begin immediate payment on contracts that are more than 60 days in arrears, an amount estimated to be more than $100 million. The total owed to the plaintiffs for 11 months of unpaid work exceeds $130 million. Read more.

Original release:

This morning, the AIDS Foundation of Chicago (AFC) joined Pay Now Illinois, a coalition of 64 Illinois-based human and social service agencies and companies, in a lawsuit against Illinois Governor Bruce Rauner and the directors of six statewide agencies.

The suit seeks immediate payment in full of more than $100 million owed for work performed under contracts that date back to July 1, 2015, the beginning of the state’s current fiscal year. AFC and the Center for Housing and Health (CHH), its supporting agency, has experienced a combined total of $630,414 in unpaid contracts in FY 2016 for their supportive housing programs. These contracts had already experienced a 50% cut by the state from FY 15 levels.

“For AFC and CHH alone, the state is threatening the lives of 136 people and four families who have very little income, face significant health challenges and rely on these crucial resources to have a roof over their heads,” said John Peller, President/CEO.

Instead of allowing clients to go unserved, AFC has been using cash reserves to fill the gap in supportive housing funding for FY 2016.

“AFC is working hard to maintain stability for our clients, because that will keep people in care,” Peller said. “The state has let us and our clients down. The current situation is unsustainable, which is why we have to take the unprecedented action of joining this lawsuit.”

AFC and CHH’s contracts from the state pay for case managers who help people who are formerly homeless and living with HIV and serious chronic diseases live stably in the community. Despite not getting paid by the state, AFC and CHH have continued to reimburse partner agencies who are providing direct services, including Alexian Brothers Housing & Health Alliance, Christian Community Health Center, the Boulevard, Northside Supportive Housing and Center on Halsted.

Coalition claims illegalities in enforcing unfunded contracts
In seeking a permanent injunction and declaratory judgment, the suit, filed in Cook County Circuit Court, charges that the Governor and other state officials have acted illegally by failing to make payments on contracts while continuing to enforce them. The suit also claims that the Governor’s veto of certain appropriation bills on June 25, 2015 was an unlawful impairment, or interference, with the agencies’ constitutional right to a legal remedy for the non-payment of these contracts. State agencies signed contracts with the social services providers, in some cases even after the Governor’s veto of the budget. The value of unpaid contracts for the members of the coalition exceeds $100 million.

The coalition members, who provide services including housing for the homeless, healthcare, services for senior citizens, sexual abuse counseling, and programs for at-risk youth, face “acute financial hardship.” Many have reduced staff and programs, and the viability of some of the organizations is threatened.

“This suit is about upholding a contract and paying your bills, basic good business practices,” said Andrea Durbin, of Pay Now Illinois. “We have delivered services under binding contracts, and now the state needs to pay us. We have delivered – and we continue to deliver – essential services to Illinois’ most vulnerable population of men, women and children as required under our contracts with the state. We are doing our part. We expect the state to do the same.”

In addition to Governor Rauner, other defendants in the suit include: John Baldwin, Acting Director of the Illinois Department of Corrections; Jean Bohnhoff, Director of the Illinois Department of Aging; James Dimas, Secretary of the Illinois Department of Human Services; Michael Hoffman, Acting Director of the Illinois Department of Central Management Services; Felicia Norwood, Director of the Department of Health and Family Services; and, Nirav Shah, Director of the Illinois Department of Public Health. In a detailed timeline of activities surrounding the Illinois budget approval process, the suit makes the case that funds were appropriated to pay the contracts, but the Governor’s action to veto appropriation bills blocked payment to service providers who had signed contracts.

“The Governor vetoed appropriation bills, and then his Administration entered into contracts for those same services,” said Durbin, who is also chief executive officer of Illinois Collaboration on Youth (ICOY), a statewide network of organizations providing services to at-risk youth and their families. “The state agencies have enforced these contracts, and have never suggested suspending or terminating them. They can’t simultaneously have us enter into a contract and perform services and then say there isn’t money to pay for them. The state has been having its cake and eating it too. That is just not good business.”